N.Y. Insurance Law § 2618: Standards for prompt investigation and settlement of claims

§ 2618. Standards for prompt investigation and settlement of claims.

(a) (1) For the purpose of this section, "natural disaster" means the

occurrence of widespread catastrophic or severe damage, injury, or loss

of life or property resulting from any natural cause, including fire,

flood, earthquake, hurricane, tornado, high water, landslide, mudslide,

wind, storm, wave action, and ice storm.

(2) This section shall apply to every insurer who writes policies that

cover loss of or damage to real property, personal property or other

liabilities for loss of, damage to, or injury to persons or property

when:

(A) a local state of emergency is declared pursuant to section

twenty-four of the executive law, when the governor declares a disaster

emergency pursuant to section twenty-eight of the executive law, or when

the President issues a major disaster or emergency declaration pursuant

to the Robert T. Stafford Disaster Relief and Emergency Assistance Act

(P.L. 93-288);

(B) the disaster is a natural disaster or a disaster caused by an act

of terrorism; and

(C) the claims are a result of such disaster.

(3) An insurer shall acknowledge the receipt of all claims in writing

to the claimant or the claimant's authorized representative in

accordance with regulations promulgated by the superintendent;

(4) If the insurer wishes its investigation to include an inspection

of damaged or destroyed property, the inspection, whether performed by

the insurer, an independent adjuster, or other representative of the

insurer, shall occur in accordance with regulations promulgated by the

superintendent. Furthermore, where necessary to protect health and

safety, immediate repairs to windows, exterior walls, exterior doors,

roofs, heating systems, water systems and electrical systems may be made

and alternative proof of loss such as photographs, video recordings,

inventories and all receipts for repairs or replacement property shall

satisfy policy requirements;

(5) A claim filed with an agent of an insurer shall be deemed to have

been filed with the insurer unless, consistent with law or contract, the

agent notifies the person filing the claim that the agent is not

authorized to receive notices of claim; and

(6) An insurer shall furnish to such claimant, or the claimant's

authorized representative, a notification of all items, statements and

forms, if any, which the insurer reasonably believes will be required of

the claimant in order to investigate such claim in accordance with

regulations promulgated by the superintendent.

(b)(1) An insurer shall, within fifteen business days of receipt of a

properly executed proof of loss and receipt of all items, statements and

forms requested under this section from the claimant, or the claimant's

authorized representative, advise the claimant in writing whether the

insurer has accepted or rejected the non-commercial claim. When the

insurer suspects that the non-commercial claim involves arson, the

foregoing fifteen business days shall be read as thirty business days.

(2) An insurer shall be granted a one-time extension of fifteen

business days to determine whether a non-commercial claim should be

accepted or rejected. If the insurer elects to utilize this extension,

it shall so notify the claimant, or the claimant's authorized

representative, in writing. Such notification shall include the reasons

additional time is needed for the investigation.

(3) (i) If the insurer needs more time to determine whether the

non-commercial claim should be accepted or rejected because the insurer

is prohibited from accessing the property to investigate the claim, the

insurer shall be granted one additional extension of fifteen business

days. If the insurer elects to utilize this extension, it shall so

notify the claimant, or the claimant's authorized representative, in

writing, setting forth the reasons additional time is needed for the

investigation.

(ii) If the insurer needs more time to be able to physically access

the property because the insurer is prohibited from accessing it, the

insurer shall so notify the claimant, or the claimant's authorized

representative, every fifteen business days, in writing, setting forth

the reasons additional time is needed for the investigation. When the

insurer is no longer prohibited from accessing the property, and the

property can be accessed, the insurer shall have no more than fifteen

days to adjudicate the claim.

(c) (1) An insurer shall, within fifteen business days of receipt of a

properly executed proof of loss and receipt of all items, statements and

forms requested under this section from the claimant, or the claimant's

authorized representative, advise the claimant in writing whether the

insurer has accepted or rejected the commercial claim.

(2) An insurer shall be granted a one-time extension of thirty

business days to determine whether a commercial claim should be accepted

or rejected. If the insurer elects to utilize this extension, it shall

so notify the claimant, or the claimant's authorized representative, in

writing, setting forth the reasons additional time is needed for the

investigation.

(3) If succeeding the one-time extension of thirty business days the

insurer needs more time to determine whether the commercial claim should

be accepted or rejected, the insurer shall so notify the claimant, or

the claimant's authorized representative, every thirty business days, in

writing, setting forth the reasons additional time is needed for the

investigation.

(4) Once the claim is accepted by the insurer, the insurer shall

advise the claimant, or the claimant's authorized representative, in

writing of the amount the insurer is offering to settle the claim. The

insurer shall also provide to the claimant, or the claimant's authorized

representative, in writing, of all applicable policy provisions

regarding the claimant's right to reject the offer and request an

appraisal.

(5) In any case where the claim is rejected by the insurer, the

insurer shall notify the claimant, or the claimant's authorized

representative, in writing, of all applicable policy provisions and

deadlines by which a claimant may sue the insurer. Any notice rejecting

any element of a claim involving personal property insurance shall

contain the identity and the claims processing address of the insurer,

the insured's policy number, the claim number, and information regarding

how to file a complaint with the department in accordance with

regulations promulgated by the superintendent.

(d) Every insurer shall pay any amount finally agreed upon in

settlement of all or part of any claim not later than four business days

from the receipt of such agreement by the insurer, or from the date of

the performance by the claimant of any condition set by such agreement,

whichever is later, except as provided in section three hundred

thirty-one of this chapter with respect to liens by tax districts on

fire insurance proceeds.

(e) The superintendent may promulgate any rules or regulations

necessary to implement the provisions of this section.